Market Roundup
- USD/JPY -0.23%, EUR/USD -0.5%, GBP/USD -0.15%
- DAX -0.3%, DXY+0.1%, Brent -0.33%, Iron -0.20% Gold +0.18%
- Macron wins French presidency, to sighs of relief in Europe
- Winning margin of 66.06-33.94 percent wider than predicted
- Macron will certainly not want to punish Britain- Econ advisor
- UK ICM poll for Sun implied Tories may get 132 seat majority on Jun 8 polls
- UK Rallings/Thrasher in Sunday Times tipped a more modest 60 seat majority
- China export/import below expectations, trade surplus slightly higher – no reaction
- Merkel’s party thumps rivals in weekend regional elections
- Dutch paint co Akzo Nobel
rejects 3rd t/o call from U.S.PPG Ind. valued at E26.9 billion
- Germany Mar. Industrial Output 1.0% vs revised 3.5% previous, 1.0% expected
- UK Apr Halifax House price 3m-y/y +3.8% vs 3.8% previous, 3.6% expected
- EZ May Sentix Index 27.4 vs 23.9 previous, 25.0 expected
- Norway Mar Manufacturing Output -1.1% vs 0.0% previous, 0.5% expected
Economic Data Ahead
- (0815 ET/1215 GMT) Canadian Mortgage and Housing Corp will report housing starts for the month of April. The indicator is expected to rise at a seasonally adjusted annualized rate of 217,500 units after increasing 253,700 units in the previous month.
- (0900 ET/1300 GMT) Mexico releases its consumer confidence data for the month of April.
- (1000 ET/1400 GMT) The Fed releases its labor market conditions index (LMCI) for the month of April. The indicator posted a rise of 0.4 in the prior month.
- (1030 ET/1430 GMT) The Bank of Canada will release its review of key risks to the financial system.
- N/A The Federal Reserve releases its Loan Officer Survey.
- (1901 ET/2301 GMT) The British Retail Consortium (BRC) will report its Like-for-Like Retail Sales for the month of April. The index declined at an annualized rate of 0.1 percent in March.
Key Events Ahead
- (0835 ET/1235 GMT) Federal Reserve Bank of St. Louis President James Bullard speaks on "Shifting Sands of Low Interest Rates" at policy session before the Federal Reserve Bank of Atlanta's 22nd Annual Financial Markets Conference in Fernandina Beach, Florida.
- (0845 ET/1245 GMT) Federal Reserve Bank of Cleveland President Loretta Mester speaks on the economic outlook and monetary policy before the "From Main Street to Wall Street: Economic Growth, Monetary Policy and the Federal Reserve" event hosted by the Chicago Council on Global Affairs in Chicago.
- (1245 ET/1645 GMT) FedTrade Ops 30-yr Fannie Mae/Freddie Mac max $1.6 bln
- (1530 ET/1930 GMT) FedTrade Ops 15-yr Fannie Mae / Freddie Mac max $525 mln
FX Beat
DXY: The dollar rebounded versus its major peers, supported by Friday's U.S. employment data, which showed nonfarm payrolls rose by 211,000 in April. The dollar against a basket of currencies traded 0.3 percent up at 98.88, retreating from a low of 98.50, it’s lowest since Nov. 10. FxWirePro's Hourly Dollar Strength Index stood at -5.57 (Neutral) by 1100 GMT.
EUR/USD: The euro declined, rebounding from six-week highs as investors took profit on centrist independent Emmanuel Macron win in the second round of the French presidential elections. Moreover, profit-taking seems to have dominated the day, with traders ignoring the upbeat release of German factory orders data. The European currency traded 0.4 percent down at 1.0954, having touched an early high of 1.1021, its highest since Nov. 09. FxWirePro's Hourly Euro Strength Index stood at -104.79 (Slightly Bearish) by 1000 GMT. The major intraday support is around 1.09400 (resistance turned into support) and any break below will drag it down till 1.0919 (200H MA)/1.08500 (Apr 27 low). Minor trend reversal can be seen below 1.0838 (200- day MA). On the higher side, any break above 1.1000 will take the pair to the high made today at 1.0210/1.10500.
USD/JPY: The dollar closed in the bullish opening gap, induced by a positive reaction to a Macron victory in France's presidential elections, and returned to the negative zone amid a slide in the treasury yields across the curve. The major traded lower at 112.58, hovering away from a peak of 113.04 hit on Thursday, its highest since Mar. 17. FxWirePro's Hourly Yen Strength Index stood at 49.86 (Neutral) by 1000 GMT. The pair has taken support near 111.75 (21 EMA) and any minor weakness can be seen only below that level. Any break below 111.75 will drag it down till 111.08 (55- EMA). On the higher side, any close above 112.20 will take it till 113/113.80.
GBP/USD: Sterling consolidated below the 1.3000 handle, as investors attention remained on this week's Bank of England policy meeting and an accelerating election campaign. Sterling trades 0.1 percent down at 1.2960, having hit a high of 1.2987 earlier, its highest since Sept. 30. FxWirePro's Hourly Sterling Strength Index stood at 59.83 (Bullish) by 1000 GMT. The pair is facing major resistance around 1.3000 and any violation above will accelerate the up move to 1.3060/1.3090. On the lower side, near term support is around 1.28500 and any break the support will drag it till 1.27549 (Apr 21 low). Against the euro, the pound traded 0.3 percent up at 84.45 pence, having hit a low of 85.08 on Friday, its weakest since Apr. 26.
USD/CHF: The Swiss franc eased as the dollar gained on the back of risk-on market profile. The major traded 0.7 percent up at 0.9937, hovering away from a low of 0.9855 hit on Friday, its weakest since Mar. 28. FxWirePro's Hourly Swiss Franc Strength Index stood at -64.25 (Bearish) by 1100 GMT. The minor jump from 0.95495 and 1.03436 will come to an end if it breaks below 0.98136. The near term resistance is around 1.000 and any break above target 1.0024. Any break above 1.0024 will take the pair till 1.00413 (61.8% retracement of 1.03435 and 0.98135)/1.0120/1.0170.On the lower side, support stands at 0.98135 and any decline below that will drag it till 0.9755.
AUD/USD: The Australian dollar hovered above the 0.7400 handle as weakness in the commodity prices continued to weigh on the major. The Aussie trades 0.1 percent lower at 0.7407, having hit a low of 0.7367 on Friday, it’s weakest since Nov. 1. FxWirePro's Hourly Aussie Strength Index stood at -93.73 (Slightly Bearish) by 1100 GMT. On the lower side, any close below major support around 0.7380 (61.8% retracement of 0.71599 and 0.7749) will drag the pair till 0.7300. The near term resistance is around 0.7440 (support turned into resistance) and any break above targets 0.7517 (21- EMA)/0.7552 (200 day MA).
Equities Recap
European shares declined after hitting fresh highs in early deals, weighed down by banks and resources-related stocks, as the French presidential vote results triggered some profit-taking.
The pan-European STOXX 600 index plunged 0.2 percent to 393.63 points, while the FTSEurofirst 300 index tumbled 0.2 percent to 1,545.75 points.
Britain's FTSE 100 trades 0.2 percent up at 7,311.86 points, while mid-cap FTSE 250 gained 0.18 percent to 19,735.55 points.
Germany's DAX declined 0.27 percent at 12,682.25 points; France's CAC 40 trades 0.85 percent lower at 5,385.61 points.
Tokyo's Nikkei gained 2.31 percent to 19,895.70 points, Australia's S&P/ASX 200 index rose 0.5 percent to 5,865.50 points. South Korea's KOSPI climbed 2.30 percent to 2,292.76 points.
Shanghai composite index eased 0.8 percent to 3,078.61 points, while CSI300 index plunged 0.7 percent to 3,358.81 points. Hong Kong’s Hang Seng added 0.4 percent to 24,577.91 points.
Commodities Recap
Crude oil prices declined, erasing early session gains as the prospect of higher U.S. production outweighed talks of further supply cuts by major OPEC exporters. International benchmark Brent crude was trading 0.7 percent down at $49.04 per barrel by 1019 GMT, having hit a low of $46.63 in the previous session, its weakest since Nov. 29. U.S. West Texas Intermediate fell 0.6 percent to $46.18 a barrel, after declining as low as $43.73 on Friday, its lowest since Nov. 15.
Gold edged up, rebounding from a seven-week low touched earlier in the session as the euro strengthened after pro-EU candidate Emmanuel Macron won the French presidential election. Spot gold rose 0.6 percent to $1,235.59 per ounce as of 1021 GMT, after touching a low of $1,220.82 earlier in the day, its lowest since March 17. U.S. gold futures were up 0.3 percent at $1,230.80 an ounce.
Treasuries Recap
The U.S. Treasuries gained ahead of a host of speeches from the Federal Open Market Committee (FOMC) members lined up for later in the day. The yield on the benchmark 10-year Treasury slumped nearly 2 basis points to 2.33 percent, the super-long 30-year bond yields also plunged 2 basis points to 2.96 percent while the yield on short-term 2-year note traded 1/2 basis point lower at 1.31 percent.
The UK gilts slid as investors wait to watch the Bank of England’s (BoE) monetary policy meeting, scheduled to be held on May 11. The yield on the benchmark 10-year gilts, rose 1/2 basis point to 1.12 percent, the super-long 30-year bond yields also climbed 1/2 basis point to 1.79 percent while the yield on the short-term 3-year traded flat at 0.23 percent
The German bunds gained as investors showed higher buying preference in exchange for the sale of French bonds after the significant victory of Independent Centrist candidate Emmanuel Macron in the overnight French elections. The yield on the benchmark 10-year bond, fell 1 basis point to 0.41 percent, the long-term 30-year bond yields slipped 1/2 basis point to 1.19 percent and the yield on the short-term 3-year bond traded nearly 1 basis point lower at -0.62 percent.
The New Zealand bonds ended the first trading session of the week on a slightly mixed tone as investors wait to watch the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision, scheduled to be unveiled on May 11. At the time of closing, the yield on the benchmark 10-year bond, fell 1 basis point to 3.08 percent, the yield on 7-year note slipped 1 basis point to 2.74 percent while the yield on short-term 2-year note traded 1 basis point higher at 2.11 percent.
The Australian government bonds plunged as investors moved away from safe-haven assets, following the expected victory of Emmanuel Macron in the French election held over the weekend. The yield on the benchmark 10-year Treasury note, jumped 3 basis points to 2.69 percent, the yield on the 15-year note climbed 2-1/2 basis points to 3.10 percent and the yield on short-term 2-year traded nearly 2 basis points higher at 1.74 percent.
